Cryptocurrencies were once the ‘enfant terrible’ of finance, traded on the Silk Road rather than Wall Street. But Bitcoin’s adoption by Amazon could push its value to five digits within months and kickstart a new approach to e-commerce, argues David Jinks, Head of Consumer Research at e-commerce fulfilment experts ParcelHero

Plastic representation( The Guardian)

There’s no getting round the fact that many cryptocurrencies originally grew in value because of their use buying on the dark web. Larry Fink, CEO of BlackRock, called bitcoin an "index of money laundering." And Jamie Dimon, CEO of JPMorgan said in September this year: ‘If you were a drug dealer, a murderer, stuff like that, you are better off doing it in bitcoin than U.S. dollars.”

This hard talk, plus a Chinese crack down on digital currencies, pushed the value of a Bitcoin down to around $2,900 in mid-September. But then something happened to reverse Bitcoin’s declining fortunes. In October rumours that Amazon would finally relent and accept Bitcoin, perhaps making an announcement in their October 26 Q3 results meeting, helped drive up the value of a Bitcoin right back up, to a then record $5,800.

Why would Amazon want to accept a currency with so shady a past? And why are many Bitcoin owners so keen to see it accepted by the e-commerce giant?

We all know most Bitcoin owners are certainly not actually spending their digital currency today, whether on drugs, household appliances or Kindles! The majority see it as an investment. As I mentioned in a Daily Express article early in November: the more mainstream a digital currency becomes; the more it will gain in value. With the value of a Bitcoin soaring to over $7,000 it’s not hard to see why.

The basic truth is Bitcoin investors are yearning for respectability and for more retailers to accept the currency. Why? Not to splurge their hard-earned satoshis on Kindles and Wii Switches, that’s for sure. No, the reason is that, with a bigger user base, the price of Bitcoin will both rise and become more resilient.

If the mere rumours of Amazon adopting Bitcoin were enough to give it such a boost, imagine if it actually does? It would send a signal of legitimacy that would broaden the user base still further, encouraging new investors. A virtuous circle.

The speculation Amazon would take up Bitcoin was fueled by a global petition on Change.org, urging ‘Amazon.com should accept Bitcoin and Litecoin cryptocurrency as payment methods ASAP’. Investors such as James Altucher, the American hedge fund manager and venture capitalist, stated: “I’m certain that Amazon will accept Bitcoin. They have no choice. And this will be the tipping point that will create massive generational wealth unlike we’ve ever seen before.”

Right now, Amazon must be wishing it had adopted Bitcoin back in 2014 when it firmly rebuffed a previous change.org petition for the company to adopt Bitcoin. Back then a Bitcoin was worth around $500; imagine the tidy extra Amazon would have made if it had sold a $500 TV for a Bitcoin and was now sitting on a $6,500 profit on the transaction!

But the yoyo values of the currency mean Amazon is still not rushing to take the plunge. Increasingly experts believe that it will one day accept the currency, but not until its see-saw values have been tamed.

Ironically, by adopting the crypto coinage, Amazon will ensure that is more likely to actually happen!